WASHINGTON (Reuters) - The new regulator of Fannie Mae and Freddie Mac has made it a priority to meet with housing and real estate trade groups, the latest signal that he is taking their concerns about credit availability on board.

Fannie Mae and Freddie Mac dominate the nation’s housing finance system, and decisions made by their regulator, Federal Housing Finance Agency Director Mel Watt, can have a big impact on the capital flowing to borrowers.

“While we are lacking policy specifics as the FHFA has been radio silent since Director Watt was sworn in, there is no doubt that mortgage credit availability will be prioritized,” said Isaac Boltansky, a policy analyst at Compass Point Research & Trading.

Watt, in one of more than a handful of meetings with housing industry groups since taking office on January 6, sat down with the head of the National Association of Realtors earlier this month to discuss the mortgage market.

“Director Watt listened carefully to our concerns,” NAR President Steve Brown said in a blog the group posted about the February 12 meeting. The item included a photo of the two arm-in-arm. “It’s clear Director Watt understands the crucial role of residential real estate to the economy.”

Watt had already rallied to the real estate industry’s side even before he was sworn by stating that he would place a hold on planned increases in fees Fannie Mae FNMA.OB and Freddie Mac FMCC.OB charge to guarantee loans.

With that move, Watt provided an early indication that maintaining borrowers’ access to mortgage credit would be a central consideration in his policy decisions.

Many consumer and housing industry groups said the fee increases would have raised certain fees charged to borrowers without perfect credit scores or large down payments. They also said it would unlikely accomplish the FHFA’s goal of attracting more private investment in housing.

His predecessor, Edward DeMarco, was often attacked by liberal groups and the political left of putting too heavy a weight on protecting the taxpayers that bailed out the two mortgage finance firms at the height of the credit crisis. DeMarco had signed off on the planned loan fee hikes.

“Watt’s career has always been political, even in private practice prior to Congress - he consistently seeks to increase economic and political opportunity for the disadvantaged,” said Brandon Barford, partner at Beacon Policy Advisors. “DeMarco is an institutionalist, while Watt is an activist.”

Fannie and Freddie currently back 60 percent of all new U.S. home loans and are sweeping their profits from the housing recovery to the U.S. Treasury. Taxpayers propped up Fannie and Freddie to the tune of $187.5 billion in bailout funds since they were seized by the government in 2008, but they have paid $185.2 billion to the Treasury in dividends for that support.

Watt’s decisions on a range of issues, from the insurance premiums the firms charge and the size of the loans they guarantee to whether or not he pushes Fannie and Freddie to take more aggressive efforts to offer homeowners assistance, will be watched closely.

“It’s clear to observers in Washington that Watt is asking hard questions on credit availability - because right now the mortgage world is limited to pristine loans, which shuts out young families and families of modest wealth,” said Robert Zimmer Head of External Affairs with Community Mortgage Lenders of America.

The FHFA and Watt declined to comment.

Watt is highly regarded by consumer advocates that see him as an ally for troubled homeowners. He will likely come under pressure to make loans less expensive and easier to get, especially for first-time and minority borrowers.

So far, however, Watt has not provided any details about his intentions on the long list of pending decisions on his plate. But many expect the former Democratic congressman to align the FHFA with the Obama administration’s policy goals.

“Mel is very careful and thoughtful. I would not expect him to move radically on any issues,” said David Stevens, president of the Mortgage Bankers Association. “I certainly would expect him to have a frequency of meetings with all stake holders.”